Back to GetFilings.com

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 28, 2003

Commission file number 1-8572

TRIBUNE COMPANY
(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: (312) 222-9100
Securities registered pursuant to Section 12(b) of the Act:

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [    ]

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes X     No o

        Aggregate market value of the Company's voting and non-voting common equity held by non-affiliates on June 29, 2003, based upon the closing price of the Company's Common Stock as reported on the New York Stock Exchange Composite Transactions list for such date: approximately $11,249,000,000.

        At February 20, 2004, there were 330,167,429 shares outstanding of the Company's Common Stock ($.01 par value per share), excluding 83,441,765 shares held by subsidiaries and affiliates of the Company (See Note 14 to the Company's Consolidated Financial Statements).

        The following document is incorporated by reference, in part:

        Definitive Proxy Statement for the registrant's May 12, 2004 Annual Meeting of Shareholders (Part III, to the extent described therein).

INDEX TO TRIBUNE COMPANY
2003 FORM 10-K

PART I

ITEM 1. BUSINESS.

        Tribune Company ("Tribune" or the "Company") is a media and entertainment company. Through its subsidiaries, the Company is engaged in newspaper publishing, television and radio broadcasting and entertainment. The Company was founded in 1847 and incorporated in Illinois in 1861. As a result of a corporate restructuring in 1968, the Company became a holding company incorporated in Delaware. References in this report to "the Company" include Tribune Company and its subsidiaries, unless the context otherwise indicates. The information in this Item 1 should be read in conjunction with the information contained in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." Certain prior year amounts have been reclassified to conform with the 2003 presentation. These reclassifications had no impact on reported prior year total revenues, operating profit or net income.

        This Annual Report on Form 10-K ("Form 10-K") contains certain forward-looking statements that are based largely on the Company's current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond the Company's control, include: changes in advertising demand, newsprint prices, cost of broadcast rights, interest rates, competition and other economic conditions; regulatory and judicial rulings; changes in accounting standards; adverse results from litigation or tax related proceedings or audits; the effect of labor strikes, lock-outs and negotiations; the effect of acquisitions, investments, divestitures, derivative transactions and litigation on the Company's results of operations and financial condition; and the Company's reliance on third-party vendors for various services. The words "believe," "expect," "anticipate," "estimate," "could," "should," "intend" and similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which are being made as of the date of this filing. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Recent Developments

        On Jan. 15, 2004, subsequent to the Company's 2003 fiscal year end, the Company sold its 50% interest in La Opinión for $20 million and recorded a pretax gain of $18 million.

Significant Events

        On March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Oregon, from ACME Communications for a total of $275 million. The Company acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV was structured as a like-kind asset exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM) with an estimated fair market value of $55 million, plus $20 million in cash.

Business Segments

        Previously, the Company's interactive and publishing businesses were separate reporting segments. However, as a result of various management and organizational changes, the two groups were integrated during the first quarter of 2003. Consequently, and in accordance with segment reporting guidelines, the operating results for the Company's interactive businesses are now reported as part of the operating results of the publishing segment. For comparison purposes, prior year results are also shown on this basis.

1

        The Company's operations are divided into two industry segments: publishing and broadcasting and entertainment. These segments operate primarily in the United States. Certain administrative activities are not included in either segment but are reported as corporate. These segments reflect the way the Company sells its products to the marketplace and the way in which it manages operations and makes business decisions.

        The following table sets forth operating revenues and profit information for each segment of the Company (in thousands). Information pertaining to 2001 does not reflect the non-amortization provisions of Financial Accounting Standard ("FAS") No. 142, "Goodwill and Other Intangible Assets," which requires that goodwill and certain intangible assets no longer be amortized to earnings, but be reviewed periodically for impairment. See Item 7 for further discussion of the effects of FAS No. 142.

(1)

Operating profit for each segment excludes interest income and expense, equity earnings and losses, non-operating items and income taxes. Operating profit before restructuring charges is a key metric used by the Company's chief operating decision maker, as defined by Financial Accounting Standard No. 131, "Disclosures about Segments of an Enterprise and Related Information," to make decisions about resources to be allocated to a segment and assess its performance.

        The following table sets forth asset information for each industry segment (in thousands):

(1)

Corporate assets include cash and cash equivalents, marketable securities and other investments.

        The Company's results of operations, when examined on a quarterly basis, reflect the seasonality of the Company's revenues. Second and fourth quarter advertising revenues are typically higher than first and third quarter revenues. Results for the second quarter reflect spring advertising revenue, while the fourth quarter includes advertising revenue related to the holiday season. Fiscal years 2003, 2002 and 2001 each comprised 52 weeks.

2

Publishing

        The publishing segment represented 72% of the Company's consolidated operating revenues in 2003. The combined average circulation of the Company's daily newspapers was approximately 3.4 million daily copies for both of the six months ended Sept. 30, 2003 and 2002. The combined average circulation of the Company's daily newspapers was approximately 4.9 million and 4.8 million Sunday copies for the six months ended Sept. 30, 2003 and 2002, respectively. The Company's primary newspapers are Los Angeles Times, Chicago Tribune and Newsday. Other daily newspapers include South Florida Sun-Sentinel, Orlando Sentinel, The Baltimore Sun, The Hartford Courant, The Morning Call, Daily Press, The Advocate, Greenwich Time, and two Spanish language newspapers, Hoy, New York and Hoy, Chicago. The Company's publishing segment manages the websites of the Company's daily newspapers and television stations, as well as other branded sites targeting specific communities of interest. The Company also owns entertainment listings, a newspaper syndication and media marketing company, a Chicago-area cable television news channel and other publishing-related businesses.

        The Company's newspaper subsidiaries produce a wide range of niche publications in addition to their flagship products. These include community newspapers, lifestyle magazines and numerous publications devoted to the major classified advertising categories. Direct marketing, commercial printing and related services are also performed by the Company's newspaper subsidiaries. Revenues for the Company's newspaper subsidiaries and other publishing related businesses for the last three years were as follows (in thousands):

        The following table provides a breakdown of operating revenues for the publishing segment for the last three years (in thousands):

(1)

Primarily includes revenues from advertising placement services; the syndication of columns, features, information and comics to newspapers; commercial printing operations; delivery of other publications; direct mail operations; cable television news programming; distribution of entertainment listings; and other publishing-related activities.

3

        The following table sets forth information concerning the Company's advertising volume for its daily newspapers (in thousands):

4

        The following table sets forth information concerning the Company's circulation for its daily newspapers (in thousands):

(1)

Circulation data based on Audit Bureau of Circulation ("ABC") averages for each of the six-month periods ended Sept. 30, 2003, 2002 and 2001.

(2)

Recognizing that advertiser and consumer demand for products and services varies by day of the week, Los Angeles, Chicago and Baltimore separate daily into two parts to provide better audience measures for advertisers. The Los Angeles Times' Thursday through Saturday ABC circulation averages for 2003, 2002 and 2001 were 996, 1,006 and 1,002, respectively. The Chicago Tribune's Wednesday through Friday ABC circulation averages for 2003, 2002 and 2001 were 681, 679 and 676, respectively. The Baltimore Sun's Wednesday through Friday ABC circulation averages for 2003, 2002 and 2001 were 301, 300 and 306, respectively.

        Each of the Company's newspapers operates independently to most effectively meet the needs of the area it serves. Local management establishes editorial policies. The Company coordinates certain aspects of operations and resources in order to provide greater operating efficiency and economies of scale.

        The Company's newspapers compete for readership and advertising with other metropolitan, suburban and national newspapers, and also with television, radio, Internet services and other media. Competition for newspaper advertising is based upon circulation levels, readership demographics, price, service and advertiser results, while competition for circulation is based upon the content of the newspaper, service and price.

        The Chicago Tribune, South Florida Sun-Sentinel, Orlando Sentinel, Daily Press, The Morning Call, The Advocate and Greenwich Time are printed in Company-owned production facilities. The Los Angeles Times, Newsday, The Baltimore Sun and The Hartford Courant are printed on Company- owned presses in production facilities leased from an affiliate (see Note 6 to the Company's consolidated financial statements in Item 8). The principal raw material is newsprint. In 2003, the Company's newspapers consumed approximately 937,000 metric tons of newsprint. Average newsprint prices increased 4% in 2003 from 2002. Average newsprint prices decreased 23% and increased 3% in 2002 and 2001, respectively.

        The Company is party to a contract with Abitibi Consolidated Inc., expiring in 2007, to supply newsprint based on market prices. Under the contract, the Company purchased 453,000 metric tons of newsprint in 2003, representing 51% of the Company's newsprint purchases. The Company has agreed to purchase 450,000 metric tons each year from 2004 to 2007, subject to certain limitations, at prevailing market prices at the time of purchase.

5

Los Angeles Times

        The Los Angeles Times has been published continuously since 1881. The newspaper has won 30 Pulitzer Prizes, including three in 2003. It is published every morning and is one of the largest metropolitan newspapers in the United States in circulation. The Los Angeles market ranks second in the nation in terms of households. In its primary circulation areas of Los Angeles, Orange, Ventura, San Bernardino and Riverside counties, the Los Angeles Times competes for advertising and circulation with 16 local daily newspapers and three daily national newspapers, with its largest local competitor having approximately 307,000 average daily circulation. For the six-month period ended Sept. 2003, the Los Angeles Times ranked 4th and 3rd in the country for average daily and Sunday circulation, respectively, according to ABC. Approximately 72% and 79% of the paper's daily and Sunday circulation, respectively, was home delivered in 2003, with the remainder sold at newsstands and vending boxes.

        In addition to the daily edition covering the Los Angeles metropolitan area, the Los Angeles Times publishes daily Orange County, San Fernando Valley, Inland Empire and Ventura County editions. Daily and semi-weekly community newspapers are inserted into the paper in selected geographic areas to provide targeted local news coverage. The Los Angeles Times Communications, LLC, publisher of the Los Angeles Times, also publishes a daily national edition that is distributed primarily in Northern California, New York and Washington, D.C. The company operates latimes.com, an online version of the newspaper, which provides local, national and international news. Through its subsidiary, EZ Buy & EZ Sell Recycler Corporation, the company publishes a collection of 14 alternative classified papers in Southern California including titles such as Recycler, AutoBuys, Cycle & BoatBuys, Homes and Open Houses, Jobs and also operates recycler.com, an online version of the publications. The company owns 50% of California Independent Postal Systems ("CIPS"), which provides alternative distribution services for advertising preprints. MediaNews Group, Inc. owns the other 50% of CIPS.

Chicago Tribune

        Founded in 1847, the Chicago Tribune is published every morning and primarily serves a nine-county market in northern Illinois and Indiana. This market ranks third in the United States in number of households. The Chicago Tribune has won 23 Pulitzer Prizes, including one in 2003. For the six-month period ended Sept. 2003, the Chicago Tribune ranked 8th in average daily circulation and 5th in average Sunday circulation in the country, based on ABC averages. The Chicago Tribune's principal competitor is the Chicago Sun-Times. According to ABC, for the sixth-month period ended Sept. 2003, the Chicago Tribune had a 28% lead in total daily paid circulation and a 169% lead in Sunday paid circulation. The Chicago Tribune's total advertising volume and operating revenues are estimated to be substantially greater than those of the Chicago Sun-Times. Approximately 81% of the paper's daily and 69% of its Sunday circulation is sold through home delivery, with the remainder sold at newsstands and vending boxes.

        The Chicago Tribune is published by Chicago Tribune Company, which also operates a number of related media businesses serving Chicagoland, including the weekday RedEye edition and chicagotribune.com. Other businesses owned by Chicago Tribune Company include Tribune Direct Marketing, which provides integrated and comprehensive direct mail services; and Chicagoland Publishing Company, which publishes a number of free guides in the real estate, automotive and help wanted categories. Chicagoland Publishing oversees the monthly magazine Chicago, an award-winning combination of narrative stories about people and events in the Chicago area and service journalism focused on dining, entertainment, health and real estate. Chicago Tribune Company offers printing and delivery of other publications.

6

Newsday

        Newsday, Inc.'s primary business is publishing Newsday, a morning newspaper published seven days a week, circulated primarily in Nassau and Suffolk counties on Long Island, New York, and in the borough of Queens in New York City. The New York metropolitan area ranks first among U.S. markets in terms of households. The paper has been published since 1940 and has won 17 Pulitzer Prizes. For the six-month period ended Sept. 2003, Newsday ranked 9th and 13th for average daily and Sunday circulation, respectively, in the country, according to ABC. Newsday competes with three major metropolitan newspapers and daily regional editions of several national newspapers. In addition, there are numerous daily, weekly and semiweekly local newspapers and free distribution newspapers in its distribution area. Approximately 58% of the paper's daily and 56% of its Sunday circulation is sold through home delivery, with the remainder sold at newsstands and vending boxes.

        In addition to Newsday, Newsday, Inc.'s niche publication subsidiary, Island Publications, publishes Distinction, a magazine serving Long Island's households, issued eight times per year; Long Island Parents & Children, a magazine for families, issued eight times per year; and Business LI, a joint venture with the Long Island Association, published 12 times per year. Newsday, Inc. has several websites including newsday.com and nynewsday.com, which are online versions of the newspaper. Newsday, Inc.'s subsidiary, DSA Community Publishing, operates Newport Media, a publisher of 105 pennysaver editions (zoned advertising editions) and This Week, a publisher of 73 pennysaver editions. Additionally, the results of amNewYork, a newly launched, free daily newspaper in New York City targeting young, urban commuters, are reported as a part of Newsday, Inc.

Other Newspapers

        The Company's other daily newspapers are The Baltimore Sun, South Florida Sun-Sentinel, Orlando Sentinel, The Hartford Courant, Daily Press, The Morning Call, The Advocate, Greenwich Time, and two Spanish language newspapers, Hoy, New York and Hoy, Chicago. Each of these newspapers is published every morning.

        The Baltimore Sun has published a daily newspaper since 1837 and has won 15 Pulitzer Prizes, including one in 2003. The Baltimore market ranks 17th in the United States in number of households. For the six-month period ending Sept. 2003, The Baltimore Sun was ranked 27th and 21st for average daily and Sunday circulation, respectively, in the country, according to ABC. The Baltimore Sun competes with The Washington Post in Anne Arundel and Howard counties, with The Annapolis Capital in Anne Arundel County and with The Carroll County Times in Carroll County. It also competes with regional editions of national daily newspapers, as well as other local dailies and weeklies. Approximately 79% of the paper's daily and 64% of its Sunday circulation is sold through home delivery, with the remainder sold at newsstands and vending boxes.

        The Baltimore Sun Company's subsidiaries, Patuxent Publishing and Homestead Publishing, publish 17 weekly newspapers throughout Anne Arundel, Baltimore, Carroll, Harford and Howard counties. The largest of these weekly newspapers are The Columbia Flier, The Towson Times, The Owings Mills Times and The Aegis. The Baltimore Sun also operates a website, baltimoresun.com.

        The South Florida Sun-Sentinel is the major daily newspaper serving the Broward/South Palm Beach county market, leading in both circulation and readership. The paper has been published since 1910. The Miami/Fort Lauderdale/West Palm Beach metropolitan area, which includes the Broward/South Palm Beach county area, ranks 6th in the nation in terms of households. Approximately 73% of the paper's daily and 68% of its Sunday circulation is sold through home delivery, with the remainder sold at newsstands and vending boxes.

        Sun-Sentinel Company, publisher of the South Florida Sun-Sentinel, also serves the news and information needs of South Florida through its breaking news and information website,

7

sun-sentinel.com, el Sentinel, a weekly Spanish-language newspaper, weekly community newspapers, niche publications, and extensive television and radio partnerships, including its close working relationship with Tribune Broadcasting's WBZL-TV, Miami, the WB network affiliate serving South Florida. Other publications produced by Sun-Sentinel Company include City & Shore, a lifestyle magazine; City Link, an alternative weekly newspaper; Florida New Homes Guide, a bimonthly real estate magazine; and South Florida Parenting, a monthly magazine providing news and advice for family oriented audiences. Sun-Sentinel Company also offers direct mail services. Forum Publishing Group, a subsidiary of Sun-Sentinel Company, publishes a group of weekly and monthly publications, including Jewish Journal, a collection of newspapers serving South Florida's Jewish community.

        The Orlando Sentinel primarily serves a six-county area in central Florida. It is the only major daily newspaper in the Orlando market, although it competes with other Florida and national newspapers, as well as with other media. The Orlando Sentinel has been published since 1876 and has won three Pulitzer Prizes. The Orlando/Daytona Beach/Melbourne market ranks 20th among U.S. markets in terms of households. Approximately 76% of the paper's daily and 70% of its Sunday circulation is sold through home delivery, with the remainder sold at newsstands and vending boxes.

        Orlando Sentinel Communications Company, publisher of the Orlando Sentinel, also publishes US/Express, a free weekly entertainment publication used to distribute advertising to non-subscribers. In addition to its newspaper website, orlandosentinel.com, the company publishes orlandocitybeat.com and go2orlando.com, and is a partner in the local weather supersite, orlandoweather.com. The company publishes the free-distribution, weekly, bilingual newspaper, El Sentinel, and its companion website, elsentinel.com. The company's multimedia portfolio also includes several free-distribution, niche products in the central Florida market including Job Xtra, AutoFinder, apartments.com magazine and New Homes magazine. Orlando Sentinel Communications also offers commercial printing services, direct marketing/direct mail services and delivery services for other publications.

        The Hartford Courant, published every morning, is the largest and most widely read newspaper in Connecticut. It is also the oldest continuously published newspaper in the United States, having been founded in 1764. The Hartford Courant has won two Pulitzer Prizes. It is published in the state's capital, Hartford, and serves the state's northern and central regions. The Hartford/New Haven market is the 27th largest U.S. market in terms of households. Hartford Courant Company has one of the most extensive zoning operations in the country, publishing ten editions of The Hartford Courant zoned for local news and advertising. The company also operates ctnow.com, Connecticut's leading news and entertainment website, and owns two subsidiaries: New Mass. Media, Inc., a publisher of four weekly alternative newspapers in Connecticut and Massachusetts, and ValuMail, Inc., a shared-mail company that distributes advertising supplements to more than two million households in Connecticut, Massachusetts, New York and Rhode Island.

        Daily Press is published daily, including Sunday, and serves the Virginia Peninsula market. Daily Press is the only major daily newspaper in its primary market, although it competes with other regional and national newspapers, as well as with other media. The Daily Press market includes Newport News, Hampton, Williamsburg and eight other cities and counties. This market, together with Norfolk, Portsmouth and Virginia Beach, is the 41st largest U.S. market in terms of households. The Daily Press, Inc., publisher of Daily Press, also owns The Virginia Gazette, which is published twice weekly and primarily serves Williamsburg, Va. and surrounding counties. In addition, The Daily Press, Inc. owns and operates dailypress.com.

        The Morning Call, published since 1895, is the dominant regional newspaper for nine counties in eastern Pennsylvania and New Jersey. Allentown/Bethlehem/Easton is the 83rd largest U.S. market in terms of households. A group of 11 weekly newspapers, The Chronicles, is distributed with The Morning Call and also to non-subscribers across three counties in eastern Pennsylvania and New Jersey. Free publications serve recruitment and real estate markets. Subsidiaries of The Morning Call, Inc.,

8

publisher of The Morning Call, offer full service direct marketing and saturation coverage through non-subscriber distribution. In addition, the company owns and operates mcall.com.

        The Advocate and Greenwich Time primarily serve the Stamford/Greenwich market in southwestern Fairfield County, Conn. The Advocate has won a Pulitzer Prize. The newspapers expanded operations in 2003 with an additional edition in neighboring Norwalk.

        The Company's Spanish language newspapers include Hoy, New York, introduced in 1998, and Hoy, Chicago, introduced in early Sept. 2003. In addition, the Company plans to introduce Hoy, Los Angeles and holahoy.com, a national Spanish language website, during the first quarter of 2004. These Spanish-language daily newspapers provide news and features of interest to Hispanics. Hoy, Chicago serves the interests of Chicago's 1.6 million Hispanics, the fourth largest Hispanic market in the United States. Hoy, New York is the second largest Spanish-language daily newspaper in the United States. Hoy, Los Angeles will serve the largest Hispanic market in the United States.

Other Publishing Related Businesses

        The Company also owns Tribune Media Services ("TMS"), which creates, aggregates and distributes news, information and entertainment content that reaches millions of users through print, online and on-screen media. The TMS Entertainment Products group creates TV and movie guide products for major media companies and consumers. TMS' print and online TV information products reach about 150 million consumers through weekly newspaper TV books, monthly cable/satellite print guides, TV information websites and new media clients. The TMS TV Week Advertising Network represents newspaper TV magazines in 42 of the top 50 U.S. markets, covering 30 million Nielsen metered households in the United States. TMS also reaches almost 9 million consumers worldwide with its cable electronic program guides. In 2003, TMS acquired the technology and patents for an interactive program guide application that be will launched in 2004 with selected consumer electronics manufacturers and cable operators.

        The TMS News and Features group creates, aggregates and represents content from more than 1,200 writers, cartoonists and publications and syndicates to more than 4,000 customers worldwide. This group is also responsible for the sales and marketing of Knight Ridder/Tribune Information Services, a joint venture between Tribune Company and Knight-Ridder, Inc. that provides text, still images and news animations to print, online and broadcast clients. TMS manages NewsCom, a joint venture between TMS and Knight Ridder, that aggregates, sells and distributes digital content from premium providers to the global media market.

        The Company also operates CLTV, a regional 24-hour cable news channel serving Chicagoland. CLTV was launched in Jan. 1993 and currently is available to more than 1.6 million cable households in the Chicago market.

Broadcasting and Entertainment

        The broadcasting and entertainment segment represented 28% of the Company's consolidated operating revenues in 2003. At Dec. 28, 2003, the segment included WB television affiliates located in New York, Los Angeles, Chicago, Philadelphia, Boston, Dallas, Washington, D.C., Atlanta, Houston, Seattle, Miami, Denver, St. Louis, Portland, Indianapolis, San Diego, Hartford, New Orleans and Albany; FOX television affiliates in Seattle, Sacramento, Indianapolis, Hartford, Grand Rapids and Harrisburg; an ABC television affiliate in New Orleans; one radio station in Chicago; the Chicago Cubs baseball team; and Tribune Entertainment, a company that develops and distributes first-run television programming for the Company's station group and national syndication.

        On March 21, 2003, the Company acquired the stock of KPLR-TV, St. Louis, and the assets of KWBP-TV, Portland, Oregon, from ACME Communications for a total of $275 million. The Company

9

acquired the stock of KPLR-TV for $200 million in cash. The acquisition of the assets of KWBP-TV was structured as a like-kind asset exchange for income tax purposes. It was funded with the remaining assets of the Denver radio station group (KKHK-FM, now known as KQMT-FM) with an estimated fair market value of $55 million, plus $20 million in cash. The results of operations of KWBP-TV and KPLR-TV are included in the consolidated statements of income since their date of acquisition.

        On July 24, 2002, the Company transferred certain assets of the Denver radio station group (KOSI-FM and KEZW-AM) with a value of $125 million to Entercom Communications Corp. ("Entercom") in exchange for the assets of WTTV-TV, Indianapolis, and its satellite station, WTTK-TV in Kokomo, Indiana, which Entercom acquired from Sinclair Broadcast Group for $125 million.

        In April 2001, the Company acquired Tower Distribution (formerly United Video), WGN Cable's distribution entity, and in August 2001, the Company acquired television station WTXX-TV, Hartford, which serves the Hartford, Connecticut market.

        The following table shows sources of revenue for the broadcasting and entertainment segment for the last three years (in thousands):

(1)

Includes the following since their respective acquisition dates: KPLR-TV, St. Louis and KWBP-TV, Portland (March 2003), WTTV-TV, Indianapolis and its satellite station WTTK-TV, Kokomo, Indiana (July 2002), WTXX-TV, Hartford (August 2001) and Tower Distribution (April 2001).

10

Television

        In 2003, television contributed 85% of the broadcasting and entertainment segment's operating revenues. The Company's television stations compete for audience and advertising with other television and radio stations, cable television and other media serving the same markets. Competition for audience and advertising is based upon various interrelated factors including programming content, audience acceptance and price. Selected data for the Company's television stations is shown in the following table: